Sierra Leone government has failed to recover millions of stolen Ebola funds

Eight months ago – June 2015, the parliament of Sierra Leone published the long awaited parliamentary committee report into the stolen $14 million Ebola funds, uncovered by an investigation conducted by the country’s Auditor General.

Though the committee report was described by many Sierra Leoneans as a State House cover-up, yet its recommendations called for millions of dollars to be paid back to the State by those held accountable by the Auditor General for the missing funds.

In particular, the parliamentary committee called for significant policy changes in the management and control of public funds, as well as the rigorous implementation of the public procurement regulations by the Ebola Response Centre and the ministry of health.

The report also highlighted serious failings by the country’s national revenue authority (NRA) in ensuring that millions of dollars in taxes were paid by contractors delivering services and supplying goods to the Ebola Response Centre and the ministry of health.

But eight months on, have those recommendations been implemented; and have the stolen funds been returned by corrupt officials in the Koroma government?

The latest report by the Auditor General published this week, makes for shocking and unpleasant reading. Not a single penny has been recovered by either the NRA, nor paid back into the State’s coffers.

It is business as usual for those bent on destroying the lives of millions of poor people in Sierra Leone, through massive corruption and impunity.

And it seems the parliamentary committee that demanded the repayment of stolen funds, are complicit in aiding the evasion of justice by many thought to be connected either to the ruling APC party or to individuals running the country.

Where is Sierra Leone heading?

The controversial decision by president Koroma, preventing the police, the Anti-Corruption Commission (ACC) and the judiciary, from carrying out their constitutional duties in bringing those responsible for the missing Ebola funds to justice, was heavily criticised by the media and civil society groups.

And today those critics have been vindicated. But sadly, not before almost 4,000 people had lost their lives, because of the serious failings of the government.

President Koroma’s handling of the investigations into the missing Ebola funds, is nothing short of the perversion of justice. He has stifled the independence and healthy functioning of the criminal justice system and the ACC.

It is now feared that this politically motivated action by State House is continuing to undermine efforts to rid the country of the culture of corruption, that has now come to define its international image, and is responsible for the abject poverty suffered by millions.

When president Koroma decided to stop the Anti-Corruption Commission Chief (Photo: Joseph Kamara, former ACC Boss, now Attorney General – stopped his investigations) from continuing his investigations into the stolen Ebola funds, and instead ‘ordered’ parliament to do the work, the Sierra Leone Telegraph warned that: “Parliament has no business interfering in the due process of law, when citizens are being held accountability for their actions by the police and the ACC.

“When citizens beak the law or are suspected of wrong doing, it is a matter for the police to investigate and the courts to pass judgement on the balance of evidence put before the courts.

“This perversion of justice has done serious damage to parliament’s credibility, as well as established precedence where a future government may, under any circumstances choose to usurp the constitutional role and functions of public institutions.”

The Sierra Leone Telegraph then asked: “Has the interrogation conducted in parliament by the committee, been a productive use of parliamentarians’ time, and hence yielded value for money for taxpayers?”

To answer this question after eight months, since the publication of the parliamentary report, we need to examine the following key findings of the committee:

Systemic failings

The Internal Audit Unit in the MoHS was ineffective. This was due to the fact that less attention was paid by the Ministry officials to Section 6(1)-(4) of the Government Budgeting and Accountability Act (GBAA).

It was also stated by Vote Controllers that political heads in the Ministry were directly involved in certain areas of operations in their Ministry outside their mandate which was in direct contravention of Section 46(1) of the GBAA.

The MoHS officials involved in the management of Ebola funds failed to apply the basic existing laws relating to procurement.

Withholding taxes were not deducted and paid to the National Revenue Authority (NRA) from payments made to various suppliers and contractors, thus violating the Income Tax Act.

The existing Procurement Committee was not charged with the responsibility of managing procurement activities. Rather, procurement activities were handled by an ad-hoc committee known as the “Case Management Team”. This act was in contravention of Section 18(1-3) of the National Public Procurement Act (NPPA).

There were inadequate controls over the disbursement of funds from the Emergency Accounts.

Most sole-source procurement methods carried out by the Ministry were done in violation of Sections 46 and 47 of the NPPA.

No evidence was provided by the auditees to support delegation of responsibilities to subordinates. This act was also in contravention of Section 3(1) of the Financial Management Regulations Act, 2007.

Some of the other findings and judgements relating to individuals and organisations accused of wrongdoing are summarised as follows:

A review of the donations register and bank statements as at 31st October 2014, of the Health Emergency Response Accounts (No. 003001118285030109 and No. 003001118285030109) held at the Sierra Leone Commercial Bank (SLCB), revealed that Le87billion and US$560,000 respectively were received as donations from generous individuals, institutions as well as from the government of Sierra Leone.

THE COMMITTEE’S COMMENTS AND RECOMMENDATIONS

The issues regarding donations through cheques that were dishonoured have now been settled with the full amount of Le1,670,000,000 receipt of which was confirmed by the Sierra Leone Commercial Bank and evidence submitted to and verified by the Committee. Therefore, the Committee recommends that the matter be closed.

Withholding taxes neither deducted nor paid over to the National Revenue Authority (NRA)

Inconsistencies were observed for a number of procurement activities agreed on between the MoHS and the suppliers; with some not having any provision for the deduction and remittance of the 5% withholding tax to the NRA. As such the Ministry failed in its obligation to withhold the 5% tax estimated at Le525, 721,555.36 and US$70,500 respectively.

THE COMMITTEE’S COMMENTS AND RECOMMENDATIONS

(a) The Committee observed that Section 116 (1) of the Income Tax Act was breached, meaning that in most of the contracts awarded by the MoHS and its agents during the period under review the 5% withholding taxes were not deducted. However, the Committee observed that some of the taxes that were to be withheld have now been paid to the NRA.

(b) As a result, the Committee recommends that NRA performs its mandate and ensure the collection of all outstanding taxes withheld or supposed to have been withheld.

(c) All contractors who were to pay taxes, and are still outstanding should make payment within a month after the adoption of this report by Parliament and failure to comply should lead to the individuals and/or shareholders stopped from participating in any business activity within Sierra Leone directly or indirectly.

(d) All payment made after the stipulated grace period ( one month) must attract penalties pursuant to the relevant tax legislations/laws of Sierra Leone.

Observations on funds transferred to four (4) ebola holding centres in Bombali district – overstatement of Le 216,800,000 in respect of incentive payments to healthcare workers.

THE COMMITTEE’S COMMENTS AND RECOMMENDATIONS

The Committee observed that some public officials do not treat their responsibilities seriously. The Committee was dismayed by the statement of the Hospital Secretary of Bombali Regional Hospital that “It was an oversight regarding the inconsistencies in the spread sheet for risk allowance payment” which was observed by the auditors. However, the Committee also noted that the sum of Le216, 800,000 being overstated payment by the hospital officials for 271 names had been refunded into the Health Emergency Response A/C before the Audit Report on Ebola Management was published. Therefore, the Committee recommends that this matter be closed.

Satisfactory documentary evidence in respect of refund made by the hospital authorities to the tune of Le 1,800,000 was submitted to the Committee during the public hearings and thus recommends that this matter be closed.

Construction of a 90 bed treatment centre at Kerry Town valued at Le 1,760,000,000

THE COMMITTEE’S COMMENTS AND RECOMMENDATIONS

The Committee observed that the procurement committee in the MoHS was not fully functional. Consequently, all procurements for services under the period of review were authorized by an ad-hoc Committee known as the Case Management Team. Furthermore, the role of the Procurement Officer in the Ministry was not fully utilised.

The Committee acknowledges that CL group has paid in full the 5% withholding taxes but equally note that CL group should refund the sum of Le 160,000,000 which was the contingency fees of the contract amount paid to the group contrary to the terms and condition of the contract as same was paid to the contractor without any record to suggest that a contingent event had happened. The Committee therefore, recommends that the said amount be refunded within one month after the adoption of this report by Parliament.

Procurement for the supply of twenty (20) ambulances valued at US$ 1,050,000

THE COMMITTEE’S COMMENTS AND RECOMMENDATIONS

Procurement procedures were not followed; Proper inspection of the 16 ambulances was not done as initially claimed by the Transport Director of the Ministry of Transport and Aviation; and; Withholding taxes were not deducted

The Committee recommends that the payment of withholding taxes amounting to US$ 52,500 should be paid by the contractor within one month from the date of the adoption of this report and the remaining (4) ambulances must be delivered in Freetown also within six weeks after the adoption of this report.

Regarding the issues raised on Mr. Kawusu Kebbay viz DSA and Air ticket, the Committee noted with conviction that the explanation adduced by Mr. Kebbay and the documentary evidence submitted by him to the Committee during the hearings was sufficient and therefore recommends that this matter be closed.

Loan to Health For All Coalition (HFAC)

THE COMMITTEE’s COMMENTS AND RECOMMENDATIONS

 The cheques totaling Le 160,900,000 were made in the name of Mr. Charles Mambu, instead of the organization under which he requested the loan, Health For All Coalition;

 The Ministry acted in contravention of Section 118[1] of the Constitution of Sierra Leone Act No. 6 of 1991;

 There was no loan agreement between the MoHS and Health For All Coalition;

 Mr. Charles Mambu, who received funds from WHO and UNICEF, which should have been used to pay back the unlawful loan he obtained from the Ministry, did not pay back the said loan. This was viewed by the Committee as deliberate and an attempt to deprive the government of Sierra Leone of needed resources.

The Committee therefore, recommends that Mr. Charles Mambu repays the loan of Le 160,900,000 within one month after the adoption of this report.

Procurement for the supply of thirty (30) used vehicles valued at Le 1, 350,000,000.

THE COMMITTEE’S COMMENTS AND RECOMMENDATIONS

 The Ministry of Health and Sanitation was in a rush to make payment for the 30 used vehicles procured by the Ministry of Transport and Aviation. Payment was made before inspection;

 The Ministry of Transport and Aviation was in contravention of government policy regarding procurement of used vehicles by government institutions; and

 The vehicles procured were mini vans which were not equipped for burial purposes. Therefore, extra cost was incurred for partitioning and repairs to suit burial purposes to the tune of Le25,050,000 and Le29,497,000 respectively.

 The Committee further observed with concern that the vehicles were all purchased at the same unit price irrespective of their difference in make, year and model.

However, the Committee acknowledges the fact that the vehicles were necessary for the purpose for which they were purchased and that withholding taxes on the contract have been paid in full and thus recommends that this matter be closed.

Procurement procedures not followed – Payments of Le708,442,300 were made to the Architectural Services Manager, Ministry of Health and Sanitation for construction activities at Lakka Government Hospital on diverse dates between June and September 2014.

THE COMMITTEE’S COMMENTS AND RECOMMENDATIONS

The Committee observed that Payments in the amount of Le708, 442,300 to the Architectural Services Manager, MoHS for construction activities at Lakka Government Hospital on diverse dates between June and September 2014 were in breach of government procurement policies and procedures.

The Architectural Services Manager in the MoHS was an employee of the Ministry and at the same time serving as a contractor of the Ministry. With regards to Laka Hospital, the Committee considers that the role of the Architectural Service Manager in the MoHS was inconsistent with her actions in the MoHS. And considering her primary functions and professional background, the Committee believes that she can do better in her previous engagement at the Ministry of Works, Housing and Infrastructure.

The Committee therefore recommends that the Architectural Service Manager be immediately sent back to the Ministry of Works, Housing and Infrastructure.

….End of the Parliamentary Committee Findings and Recommendations published Eight Months ago…..

After eight months expecting that all of the above findings and recommendations made by parliament have been addressed and implemented by the Koroma government, two days ago – Thursday, 25th February, 2016, the Auditor General published her second report on the stolen Ebola funds.

This is a summary of what she found:

Majority of the comments and recommendations made by the Public Accounts Committee (PAC) on the previous Ebola report, have not been implemented by the concerned institutions or officers. Few examples include the following:

The committee recommended that Mr. Charles Mambu repays the loan of Le160,900,000 within one month after the adoption of its report. There was no evidence to indicate that this was done.

The committee urged NERC and Ministry of Health and Sanitation Ministry of Health and Sanitation (MOHS) to fast-track all outstanding payments to suppliers after the adoption of its report. This is far from been completed.

The committee recommended that the National Revenue Authority (NRA) performs its mandate and ensure the collection of all outstanding taxes withheld or supposed to have been withheld. We have not been provided with any evidence to indicate that such outstanding taxes have been recovered.

A number of lapses were observed in the way and manner fixed assets were managed and controlled by both NERC and MOHS. For instance, NERC did not ensure that majority of its vehicles and motorbikes were registered, licensed and insured. It was also observed that NERC had no policy in place for the management and use of its fixed assets.

The assets register presented by NERC did not cover furniture and fittings, computers and other equipment that were bought / donated by international partners for its operations.

Furthermore, a number of vehicles and motorbikes which were controlled by NERC were not available for physical verification. The MOHS did not provide the audit team with a list of vehicles, ambulances and motorcycles that were transferred to NERC and other Ebola related institutions. We were also unable to see a structured plan or basis upon which those assets were distributed by the Ministry.

The processes of some procurement actions were not open, competitive and transparent. Control measures that were supposed to be instituted when procurement are made in an emergency situation, were completely ignored for those procurement.

For instance, certain bids were neither evaluated, nor the evidence of procurement committee minutes to justify the selection of contractors. There were instances in which goods were either delivered before the contract agreements were signed or certain supplies were made without contract agreements.

Furthermore, the payment made to Mac Med Investment of Le840,000,000 on November 21st, 2014 for the supply of discharge packages to survivors in the regions was in excess of Le80,000,000.

We noted that the withholding tax of Le40,000,000 was added to the contractor’s total / actual cost of Le800,000,000; instead of it being deducted at source from the actual cost.

In addition, the sum of Le500,000,000 was paid to Catherine’s Catering Services for the supply of food to specific Ebola Centers in Bombali District even though the fiduciary agent (BDO) who was responsible for certifying payments could not rely on the payment request made by the contractor.

It was evident from our audit that the Ministry of Health and Sanitation (MOHS) did not ensure that adequate funds were available within its coffers/budget, prior to initiating procurement proceedings.

As a result of that, the Ministry is still owing some contractors the sums of US$488,280 and Le887,123,914 for goods and services, and/or works projects which have been delivered and/or completed to specification. There is no evidence that the MOHS is dissatisfied with the delivery.

The controls over disbursement of funds were not always adequate. For instance, retirement details in respect of funds given to some government and non-governmental institutions valued at US$145,000 and Le7,542,607,075 respectively, were not made available to justify the utilisation of those funds.

Payments which amounted to Le2,120,471,750 were made from the Ebola Response Account for food items without adequate documentary evidence such as receipts, distribution list and delivery notes.

Withholding taxes which amounted to Le67,187,725, in respect of payments made for goods, services and accommodation, were neither deducted, nor paid to the National Revenue Authority.

It was observed that monthly progress reports as dictated/prescribed by the employment contract agreement were not done by the consultants during the audit period.

The sum of Le7,767,185,043 which has been unclaimed (i.e. held in the wallet of the Mobile Commerce Partners-MCPs) for periods up to April 2015, has still not been returned to the emergency response account. The management of NERC should therefore implement the recommendations of the audit queries, as detailed in the body of the report. This will enhance an effective system of control and improve the accountability and operational effectiveness of the agency in the future.

The management of NERC should also ensure that control procedures that are necessary for sound and prudent financial management and the rules and regulations in respect of them are adequately and appropriately followed.

…….End of Auditor General’s Report Finding published two days ago……

What is now evidently clear is that both State House and parliament have at best, seriously misunderstood their roles and functions, and worse – abuse their powers.

What parliament ought to have done after the Auditor General had published her first report into the missing Ebola funds is that, the Anti-Corruption Commission working with the police, should have carried out a thorough forensic investigation into each of the cases cited in the Auditor’s report.

Once that task had been completed by the ACC and the police, charges should have been brought and those indicted brought before the courts.

Following the completion of the court trials, parliament should then have commissioned an independent enquiry into the systemic failings that had led to the massive theft of Ebola funds.

But it is also clear by all accounts that, the interference of both State House and parliament in this unprecedented corruption scandal was politically driven, and has cast serious doubt once again over president Koroma’s ability and commitment to provide effective leadership and good standard of governance in Sierra Leone.

And as the international community and the World Bank consider options as to how best to financially support Sierra Leone in its recovery after Ebola, it is important that issues of competence, commitment, capacity and accountability be taken into account.

Once again, the Sierra Leone Telegraph is calling for all post-Ebola recovery funds to be channeled directly to non-governmental sectors through contractual agreements, with clear mandates, performance monitoring and governance assurance arrangements put in place.

This episode must be a warning to State House and parliament itself, that parliament does not have the mandate, capacity, resource capability and expertise required to conduct criminal investigations to a much higher standard of rigour, than that which the police, the Anti-Corruption Commission and the courts can achieve.

The twenty-first annual edition of the Transparency International Corruption Perception Index 2015, published earlier this month, ranked Sierra Leone 119 out of 168 countries worldwide, but with a much lower score of 29 over 100, compared to 2014 (31 over 100), 2013 (30 over 100), and 2012 (31 over 100).

In just four years, corruption in Sierra Leone has gone up by two percentage points, says Transparency International.

Sierra Leone’s corruption is four percentage points worse than the Sub-Saharan average of 33 over 100.

According to the report: “Sub-Saharan Africa faced a myriad of threats in 2015, from the Ebola epidemic to rising terrorism. Again and again we saw corruption exacerbate the causes of crises, and undermine the response.”

In Sierra Leone we saw $14 million of funds meant to help treat and ease the suffering of thousands dying of Ebola, stolen by corrupt public officials and their private sector cronies.

According to the Transparency International report: “Poorly equipped schools, counterfeit medicine and elections decided by money are just some of the consequences of public sector corruption. Bribes and backroom deals don’t just steal resources from the most vulnerable – they undermine justice and economic development, and destroy public trust in government and leaders.”

“A poor score is likely a sign of widespread bribery, lack of punishment for corruption and public institutions that don’t respond to citizens’ needs.”

1 Comment

Another woman has done it once more. The editor General Lara Taylor-Pearce (Mrs.) and her dedicated team had put things right again in this country, following the foot steps of Mz Christiana Thorpe, former NEC Chairwoman who performed a formidable task with excellence in 2007 where she demonstrated bravery upholding democratic tenants in an intimidating and hostile atmosphere, in the run up presidential elections between Berewa SLPP and Ernest Koroma of the APC, she left Sierra Leoneans dumbfounded when she appeared to announce, Ernest Koroma of the opposition APC candidate the winner.
Sierra Leone women are claiming their rightful place in the governance of this country and, it must be reckon with.
Well done Madam Editor General for the exhaustive investigation carried out and coming up with a comprehensive report on the mismanagement and embezzlement of the Ebola funds by government officials and their cronies, monies meant to save the lives of the Sierra Leone people in the wake of a dreadful disease. This is the worst-case scenario of corruption in the APC government.
This report threw spotlight over the dark clouds and mystery which prevailed in the Ebola Response Centre and the ministry of Health. A heartless scramble for overnight wealth where disorder was an excellent performance of their responsibilities, what a kind of heartless humans!
The findings in this report will test the willingness of our president and his intension to uproot the scourge of naked corruption in his government. It is lamentable indeed for the Sierra Leone people to deserve this class of authorities. Mr. President, the people would like to see you act to expectation. It is an opportunity for you to come clean and free yourself from a generalize verdict by all Sierra Leoneans.

WITH CORRUPTION EVERYONE PAYS

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